When you see what has happened in print and felt the sting of the automobile catagory as it has drawn back on ad buys over the last year, it is hard to believe that Zenith-Optimedia projected "Online Ad Spending Rises At Double Digit Rates, Gains Market Share VS. Other Media". but the facts bear it out....
Based on current trends, the agency projects Internet ad spending will rise to $56.8 billion this year, or 12.6% of the global advertising economy. That means the Internet will pick up more than two points of worldwide advertising share, this year, and its momentum is only expected to accelerate.
"By 2011 we expect it to account for 15.1% of all ad expenditures, up from 10.5% in 2008," the report predicts. "Most of this growth will come from paid search, which is an ideal method of reaching consumers looking for bargains. In the U.S., we predict search advertising to grow 20.0% in 2009, while traditional display grows 3.0% and classified grows just 1.8%."
ZenithOptimedia attributed some of the surge in the U.S. search advertising marketplace to the launch of Microsoft's new Bing search engine, which is creating "welcome competition to Google and should spur further innovation in search."
The gain's in the Internet's share of global ad spending appears to be coming at the expense of every other major medium. ZenithOptimedia predicts spending in all other media will decline this year.
Overall ad spending is now expected to decline 8.5% this year, down from ZenithOptimedia's April forecast of a 6.9% drop.
ZenithOptimedia said the first quarter "came in below our expectations," and that, "faced with extreme uncertainty, advertisers in most sectors planned for the worst and cut their costs in anticipation of steep drops in revenue. In uncertain times advertising is often treated as a discretionary expense and cut early, despite much research that shows companies maintaining their ad expenditure in a recession come out of it stronger than those that do not."
I have seen that last sentence quoted 50 different ways through this recession but it seems some advertisers ignore the sage advice from those that have weathered downturns before, they know how hard and expensive it is to gain market share once you have given it up.